Reuters reports that China’s state-owned oil companies have suspended purchases of seaborne Russian oil following the latest US sanctions on Rosneft and Lukoil, Russia’s two largest oil producers.
The decision marks a major escalation in the impact of Washington’s measures, as China and India have been among the biggest buyers of Russian crude since Western sanctions were first imposed after Moscow’s invasion of Ukraine.
According to Reuters, Indian refiners — the largest importers of seaborne Russian oil — are also preparing to significantly cut crude purchases from Moscow to comply with the new restrictions.
The sudden pullback by both China and India is expected to deliver a serious blow to Russia’s oil revenues, forcing Moscow to seek alternative markets or sell at steeper discounts.
Analysts warn that reduced demand from Russia’s two largest customers could also tighten global supply, driving upward pressure on oil prices worldwide as major importers scramble to secure new crude sources.
EU Adds Chinese Refiners and PetroChina Trading Arm to Russia Sanctions List
In another major escalation in the global oil market, the European Union has added two Chinese refineries and a PetroChina trading subsidiary to its Russia sanctions list, according to the bloc’s Official Journal published on Thursday.
The sanctions target Liaoyang Petrochemical and Shandong Yulong Petrochemical, which together have a combined refining capacity of 600,000 barrels per day (bpd) — around 3% of China’s total 19 million bpd refining capacity.
Also sanctioned was Chinaoil Hong Kong, a trading arm of PetroChina, which has been a key intermediary in the global oil trade.
The move comes amid tightening Western measures against entities accused of circumventing sanctions on Russian oil exports. It follows the US decision to impose sanctions on Rosneft and Lukoil, which has already prompted Chinese and Indian refiners to suspend or reduce purchases of Russian crude.
Analysts say the EU’s latest action could further disrupt Russian oil flows, strain China’s refining sector, and contribute to upward pressure on global crude prices, as markets adjust to the widening scope of energy sanctions.
